Bankruptcy Frequently Asked Questions

Will I be forced to sell my home?

If you have equity in your home, the 'Official Receiver' or 'Trustee in Bankruptcy' will need to consider the option of selling your property to release the equity from within it which will be used to pay to your creditors.

If your property is owned jointly they will be given the opportunity to purchase your share of the equity in the property.

Will my mortgage lender be informed?

The 'Official Receiver' or 'Trustee in Bankruptcy' will need to notify your Building Society, Bank, or any other secured lenders that have an interest in your estate.

How will my creditors be repaid?

The 'Official Receiver' or 'Trustee in Bankruptcy' will be required to prioritise the creditors once your assets have been realised. The order which is followed is:

• Fees of Insolvency Practitioner's
• Costs of realisation of assets, (i.e. Estate Agency fees)
• Any claim from the Redundancy Payments Office, in respect of employees wages.
• Unsecured creditors.

Can the Bankruptcy be annulled?

Yes. A bankruptcy can be annulled by a Court Order, which would remove any record of the Bankruptcy Order.

What does 'Discharge from Bankruptcy' mean?

This is when you become released from any of the restrictions imposed on you by the Bankruptcy Order.

Which debts will not be written off?

1. Court fines such as maintenance orders, Child Support Agency payments and any other fines made through family courts.
2. Any debts included in the bankruptcy which were connected with fraud.
3. Student Loans.
4. Any debts connected with or arising from personal injury claims.
5. State benefit overpayments.
6. Secured Creditors.

Can I keep my Bank Account?

No. All your bank accounts and credit cards will be closed down.

Will everyone know I'm Bankrupt?

Your bankruptcy will be advertised in the national and local press and it will also be noted on your credit file.

How long does Bankruptcy last?

Bankruptcy lasts for a period of twelve months, however in certain circumstances it can less or a lot longer should you not comply.